That is according to the Automobile Association (AA), which was commenting on mid-month data released by the Central Energy Fund this week. Based on the same data, it has also been predicted that the price of diesel will drop by 36 cents to the litre, while the price of illuminating paraffin will likely drop by 21 cents.
The news comes in the wake of Cyril Ramaphosa being sworn in as the new President of South Africa on Thursday, and just hours before he delivers his first State of the Nation Address in the National Assembly.
“International oil prices have been declining steeply since the start of February, and this factor has accounted for approximately half of the petrol price reduction, and more than two-thirds of the diesel price reduction,” said the AA on Friday.
“Over the same period, the rand/US dollar exchange rate traded in a band around R12 to the dollar mark, giving some additional price relief for fuel users,” added the AA.
The AA said the resignation of Jacob Zuma as South Africa’s Head of State could not be ignored, adding that it definitely played a significant hand in the performance of the rand.
“The resignation of Jacob Zuma as president of South Africa caused some strengthening of the Rand, and we expect this to have additional impact on the fuel price before month-end.”
There is a great sense of euphoria, following the election of Ramaphosa as South Africa’s new Head of State. However, the AA warns that South African motorists are not out of the woods just yet.
“However, this does not mean the economy is out of the woods. The state is facing enormous losses due to tax under-collections, mis-management at state-owned enterprises, and a rising debt burden.
“The country is also on notice for a further credit rating downgrade, which might be triggered after next week’s Budget if the numbers come in behind expectations. We advise motorists to be extremely prudent and not bank on ongoing fuel price declines in the medium term.”